Confidence in Housing Market Rose in February

Consumer confidence in the U.S. housing sector continued to rise in February, but more people expect mortgage rates to increase over the next year, according to Fannie Mae 's monthly national-housing survey.

The mortgage-finance company said its poll of 1,008 Americans showed home prices are expected to rise an average of 2.9% over the next year, slightly higher than the 2.4% increase expected in January.

The share who believe home prices will go up in the next 12 months was 48%, a survey high, while those who think home prices will fall held steady at the survey low of 10%.

The percentage who think mortgage rates will go up increased to 45% from 41% in January, while those who think they will go down held steady at 7%.

Fannie Mae also said 25% of respondents believe now it is a good time to sell, the highest level since the survey’s inception in June 2010.

About 50% expect home-rental prices to increase over the next year, matching the high set in January.

When asked about the state of the economy, 38% said it is on the right track. The share of consumers who expect their personal financial situation to improve over the next year fell by two percentage points to 41%.

“Despite fiscal headwinds and political uncertainty, consumer sentiment toward housing is robust and continues to gather strength,” said Doug Duncan, chief economist at Fannie Mae. “We expect home prices to firm further amid a durable housing recovery, gradually reducing the population of underwater borrowers and helping to boost the share of consumers who say that now is a good time to sell.”